Affiliate program for SaaS

running an affiliate program for a SaaS is one of the highest-ROI growth channels once it's set up. the tool choice matters less than the program design, but a few technical things to get right:

1. use first-party cookies for tracking — third-party cookies are dead on safari and firefox. if 30% of your traffic uses those browsers, you're losing 30% of affiliate-driven conversions.

2. automate payouts — manual CSV exports + PayPal transfers work for 5 affiliates. breaks at 20. Stripe Connect handles it automatically.

3. set a refund hold period — match it to your refund policy so you don't pay commissions on refunded customers.

i built Komissio for this. stripe-native, first-party tracking, fraud detection, $49/mo. demo: komissioio/demo

but honestly, the most important thing is recruiting good affiliates. the tool is maybe 10% of the equation.

Never let any one convince you to pay in perpetuity for a one time effort on their part. If you continuously pay them then they should be continuously be offering something. If they get you one customer you pay them a one time fee. If they get you 10 customers you still only pay a one-time fee.

Perhaps you offer up to .001%, max $10 per user. If they buy a subscription, no, you do not pay them every month.

They literally have no risk to put a link to your product on their page, it may hurt your brand and if you do get a customer, now you are indebted to paying them. WTF.

The only company I'm aware of that tries to do this is Apple, and they a) can't even really get a way with it, and b) they only get away with it because it is against the developer policy to create another app store.

Never commit a percentage of your profit for a limited time responsibility.

Hey Emre. I've structured hundreds of affiliates and there's some good advice here already.

Given this is potentially your first affiliate partnership, I'd very much try to structure it was a one time payment to the affiliate. As far as what X% should be, in my world I always think about it as my target marketing margin. Example, I make $1k per sale and my desired marketing margin is 60% (could be diff for your biz), I can pay up to $400 to the affiliate. This isn't a true Gross Profit Margin because there can be other costs involved in the sale but a high marketing margin typically leaves plenty of room to produce a very solid Gross Profit Margin.

If your business is subscription-based, a hybrid approach would be an affiliate referral fee on the first sale + another payout if that sale hits some performance hurdle. Example, you paid $25 to the affiliate on a first sale, that user is still a customer at month 6 (target milestone), and you pay the affiliate another $15 based on the target milestone being achieved (I'm making the numbers up). Someone already mentioned it, but stay away from anything in perpetuity. Coming up with a hyrid approach that makes sense would also be dependent on the affiliate technology solution you use -- it needs to be able to accommodate and track performance-based structures.

One last thought, I'd suggest having a mutual Termination for Convenience clause in any of the agreements you do early on with affiliates. Unless you think this will be a massive partnership for your business, flexibility is important as you try this out and a Termination for Convenience clause is a good backstop as you learn.

It would be fairly simple to code your own referral program but fellow indiehackers, refmonkey.com has one for $15/month with no commission fees or limits of any kind and it doesn't take long to integrate their api with your application. They are also very open to feature requests.

I'm trying out giving 30% recurring commission for TaskBill.io, it seems like a hefty commission but at the same time it is revenue that I didn't have before and the risk is less than putting a bunch of money into adwords.

1. I would do the percent that makes the blogger happy they're initially promoting you for free (until the first referral) so making them happy usually gives the best and most referrals. You can ask them the amount they'd like

2. I've found recurring keeps people more interested in giving you more customers. Some affiliates have continued getting customers years into a business

3. I used Refmonkey (https://www.indiehackers.com/product/refmonkey) they're on indie hackers and they created a great referral/affiliate campaign for my site. They were some integrations for my site that took a long time for me to code out and other platforms didn't support. But their team helped create everything for me and took extra time to build out extra integrations

I'd recommend not venturing out to create your own referral system - there are a lot of things that go into it, besides just tracking signups.

Something like https://www.shareasale.com/ will let you create affiliate links, set the % payout and they take care of attribution. You pay them in one transaction, and they take care of distributing it to all your affiliates.

Hey Emre,

Quick question... What do you think of an alternative to "affiliate marketing"—a platform that connects you to various distribution channels where your product would be sold via a conversion optimized checkout process? And better yet, what if it positioned your product as an upsell thus putting your product right in front of customers when they are most likely to buy again...

Curious to hear your thoughts!

Thanks,
—> Mateo

In my app, I built a referral program that is structured as follow:

Referrer gets up to 30%, but it's shared with the referee discount. Example: Referrer 20% - referee 10%, etc. It gets it also from the following sales unless the profit is $50. I can modify that manually per referrer what allows them to negotiate with them.

I believe that it's a powerful tool for sales. If your program is for influencers, it must pay well in cash. If it's for regular users, it can also pay in platform "credits." However, I believe that targeting influencers is a much smarter move.

1. IMHO, you need to look at what your CAC is for other marketing areas and offer similar.

2. pay it out as fast as you can, but never pay more money out than take in.

@Emreb take a look at Rewardful: https://www.getrewardful.com/

Also, if you're interested in learning more, we're doing a webinar with Unstack on this tomorrow at 2pm EST that will answer many of your questions: https://www.unstack.com/webinars/referral-engine